TERMINATING OLDER, LONG-SERVICE EMPLOYEES - EMPLOYERS ARE NOW BEING PUNISHED BY THE COURTS FOR "FORCED RETIREMENT" TERMINATIONS

There is an emerging trend in Ontario employment law – Courts are giving increasingly more reasonable notice, or pay in lieu, to advanced age, longer-service employees.

If an employment contract does not contain an enforceable termination provision limiting the terminated employee’s notice to the statutory minimums set out by the Employment Standards Act, 2000, the employee dismissed without cause will be entitled to “reasonable notice” of termination at common law. Historically, the limit for reasonable notice given by Ontario Courts has been twenty-four months – that is now changing, particularly for older, longer-service employees.

In a recent case, a 62-year-old senior VP, who had worked for the employer for 37 years, was granted 30 months’ reasonable notice, but the Court noted it would have awarded even more, if that had been requested by the employee. The Court noted “a change in society’s attitude regarding retirement” and that “presumptive standards no longer apply”, including because many people now work beyond the age of 65.

In another recent case, the Court granted 24 months’ notice to a 60-year-old office manager, who had been employed for 12 years before being summarily terminated. In doing so, the Court noted the employee’s age (close to retirement), loyalty and dedication during his employ, and his lack of formal education and training to utilize to find alternative, comparable employment.

As a result, “forced retirement” terminations by employers are both on the rise and increasingly challenged by the Court, so much so that very significant damage awards are trending upwards.

This WARDS LAWYERS PC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.